Personal Finance Writer Scott Burns Applies, Extends Famed ''Couch Potato'' Investing Philosophy with Web Startup: Dallas-Based AssetBuilder Offers Low-Cost, Risk-Managed Index Investing Through Pre-Constructed Portfolios Grounded in Financial Science

Share Article

Nationally syndicated personal finance writer Scott Burns has long been skeptical of Wall Street's high-priced stock pickers and fund managers. Burns developed the widely praised "Couch Potato Portfolio" to demonstrate that diversified index investing could be just as effective as managed-fund investing over the long term - with less risk and at far lower cost.

Through AssetBuilder, we've wedded low-cost index investing with a Web-based service platform to create a uniquely cost-efficient option for investors. We make choosing and implementing a personal investment strategy simpler and more affordable than ever.

    Now Burns is teaming with former Microsoft executive Kennon Grose to extend his low-cost investing approach to the Web - with a startup called AssetBuilder that enables investors with nest eggs starting at $50,000 to select from pre-constructed portfolios and pay annual fees as low as 25 basis points.

The Registered Investment Advisor (RIA) has attracted more than $75 million in assets under management since its launch in April 2007 -- and is growing rapidly.

"AssetBuilder issues a simple challenge to Wall Street: Prove that your stock pickers and mutual fund managers are worth the fees you charge for them. In most cases, they aren't," says Burns, the firm's chief investment strategist.

"We believe that real value is delivered not in trying to outperform the market, but in constructing portfolios that capitalize on the market's long-term return. That's what AssetBuilder portfolios are built to do."

Adds Grose, the company's president and CEO: "Through AssetBuilder, we've wedded low-cost index investing with a Web-based service platform to create a uniquely cost-efficient option for investors. We make choosing and implementing a personal investment strategy simpler and more affordable than ever."

How Does AssetBuilder Do It?

Burns unveiled the original "Couch Potato Portfolio" in 1987. The strategy was to combine index investing with asset allocation to create an "all-weather portfolio" that would minimize risk, cost and complexity for the mainstream investor. Burns ultimately developed a family of portfolios based on investor risk tolerance and other factors.

Extending Burns' "Couch Potato" philosophy, AssetBuilder combines enhanced index investing with risk-reducing diversification strategies. Investors select online from a menu of pre-constructed portfolios grounded in Nobel Prize-winning financial science. The company's portfolios feature funds from Dimensional Fund Advisors (DFA), the leader in applying Modern Portfolio Theory to design "smart" index funds and limit trading costs.

AssetBuilder's fees are among the lowest in the financial services industry. The company charges clients between 0.25 and 0.45 of one percent of assets under management annually. This compares to an average fee of about one percent among RIAs, and the much higher fees and commissions charged by traditional brokers.

"Brokerage houses and other legacy financial services companies have become hopelessly outdated - although they don't seem to realize it yet," Burns says. "They will have to change their pricing models dramatically if they are to survive the challenge that a company like AssetBuilder presents."

AssetBuilder's Origins - and Future

In late 2006, Burns retired from The Dallas Morning News after more than 20 years at the newspaper. Upon making his decision, Burns had dinner with Grose, a longtime friend. The two men brainstormed the idea for a new kind of investment firm - one that would wed Burns' common-sense approach to investing with a low-cost, Web-based service platform.

"AssetBuilder's clients are weary investors seeking an alternative to Wall Street's games," Burns says. "They are tired of watching fund managers attempt to outperform the market and each other -- because it's the investor who ultimately absorbs the risks and costs of these games."

Grose adds: "Our business model has many in the industry calling us the low-cost provider. The reality is, we are disrupting an entire system rife with overpriced services, unnecessary risk, and burdensome complexity. Our success has already influenced other RIAs to lower their management fees and focus on diversification. This is just the beginning of AssetBuilder's impact."

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms. With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever. Co-founded by personal finance writer Scott Burns, AssetBuilder's portfolios are an extension of Burns' widely praised "Couch Potato" methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor. For more information, visit the company's Web site at http://www.AssetBuilder.com.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Cathy Baradell
Visit website